Many small business owners might believe they would never fall victim to cybercriminals, but this could be a fatal mistake for your business.
In fact, it’s a common misconception that cybercriminals only target large corporations. But a 2019 study found that 43% of all data breaches impacted small businesses. Once a data breach strikes, it costs businesses, on average, about $150 per record that was stolen. This could result in a loss of thousands of dollars, and what’s worse is that about 60% of small businesses that fall victim to a data breach shut down within six months.
And it’s not just external data breaches that small businesses have to worry about, there are many ways that cybercriminals can steal your digital assets, including:
Chances are you don’t have a dedicated IT staff that can regularly monitor cyber risks, which can leave you especially vulnerable for cyberattacks. With so many cyber-related risks out there, how can small business owners protect their valuable information? This is where Cyber Liability insurance comes in. It can help your business recover from these incidents, but who really needs Cyber Liability? Ask yourself these questions:
If you answered yes to either of those questions then you should definitely consider purchasing this policy.
What is Cyber Liability insurance and what does it cover?
Cyber Liability insurance is designed to protect your company’s data, digital assets, and sensitive information. Keep in mind, coverage can vary depending on the individual risk profile of your company, however, a standard policy can cover the following elements:
These elements can be covered whether the origin of the breach is internal, such as an employee leaking sensitive information, or an external breach from hackers.
What’s excluded from a Cyber Liability policy?
Again, every policy will be different based on the carrier and your business needs, however as a general rule Cyber Liability will not cover the following elements:
Is Cyber Liability insurance expensive?
Just as there’s no one-size-fits-all coverage, there’s no standard price tag for Cyber Liability and the price of your premium is determined based on several factors, including:
However, there are some ways you can save money on your policy. If you can demonstrate a strong safety record and proactively minimize your liability you can lower your premium. Here are some tips to keep in mind:
The cyber-threats facing small businesses continue to evolve every day, so it’s important to take proactive steps to protect yourself. Don’t fall into the trap of thinking your business isn’t vulnerable to cybercriminals. If you handle any online transactions or sensitive information, you’re susceptible to hackers.
It’s important to put a plan in place to keep your digital assets safe, however, there’s nothing that can completely eliminate the threat of data breaches. It’s important to talk to your insurance provider about Cyber Liability insurance. This is the only policy that’s designed to help your business recover from a cyberattack, and it can help give you peace of mind to focus on growing your business.
By Emily Lazration, CoverWallet
Emily is the Content Marketing Specialist at CoverWallet, a tech company that makes it easy for businesses to understand, buy, and manage commercial insurance online. She has written for several outlets including Inc., Ooma, and Fundera covering small business news and advice.